The Myth of Corporate Cash Hoarding

Companies hire more workers when there's income to pay them. They don't liquidate financial assets.

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BY ALAN REYNOLDS

American nonfinancial corporations were "sitting on" $1.93 trillion in liquid assets at the end of last year's third quarter, according to the Federal Reserve Board. This has become one of the most frequently echoed statistics, viewed as indisputable evidence that U.S. business leaders are unduly timid or evil.

Last September, Chris Matthews, the host of MSNBC's "Hardball," asked Politico's Charles Mahtesian, "You think business can sit on those billions and trillions of dollars for two more years after they screw Obama this time? Are they going to keep sitting on their money . . . to get Mr. Excitement Mitt ...

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